Correlation Between Betmakers Technology and Midway

Can any of the company-specific risk be diversified away by investing in both Betmakers Technology and Midway at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Betmakers Technology and Midway into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Betmakers Technology Group and Midway, you can compare the effects of market volatilities on Betmakers Technology and Midway and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Betmakers Technology with a short position of Midway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betmakers Technology and Midway.

Diversification Opportunities for Betmakers Technology and Midway

0.63

Correlation Coefficient

Betmakers Technology  Midway

Poor diversification

The 3 months correlation between Betmakers and Midway is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Betmakers Technology Group and Midway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midway and Betmakers Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Betmakers Technology Group are associated (or correlated) with Midway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midway has no effect on the direction of Betmakers Technology i.e., Betmakers Technology and Midway go up and down completely randomly.

Pair Corralation between Betmakers Technology and Midway

Assuming the 90 days trading horizon Betmakers Technology is expected to generate 1.51 times less return on investment than Midway. But when comparing it to its historical volatility, Betmakers Technology Group is 1.32 times less risky than Midway. It trades about 0.07 of its potential returns per unit of risk. Midway is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  96.00  in Midway on September 3, 2024 and sell it today you would earn a total of  29.00  from holding Midway or generate 30.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Betmakers Technology Group  vs.  Midway

Betmakers Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Betmakers Technology Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Betmakers Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Midway

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Midway are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Midway unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Betmakers Technology and Midway

The main advantage of trading using opposite Betmakers Technology and Midway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betmakers Technology position performs unexpectedly, Midway can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Midway will offset losses from the drop in Midway's long position.

The idea behind Betmakers Technology Group and Midway pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.